As a testament to the maturity of forest and water disclosures through the CDP information request, the Climate Disclosure Standards Board is expanding its Reporting Framework to include water and forest risk commodities. The expanded framework will provide guidance for companies in integrating this information into their mainstream corporate reports and start on the journey towards integrated reporting.

1. @CDSBGlobal www.cdsb.net 1
Integra(ng
environmental
performance
&
risk
in
mainstream
financial
reports
Dr
Jarlath
Molloy
CPhys
Technical
Manager,
CDSB
CDP
spring
workshop

2. @CDSBGlobal www.cdsb.net 2
Outline
+ About
the
Climate
Disclosure
Standards
Board
+ External
repor(ng
drivers
+ Not
another
Framework?
+ Consulta(on
+ Summary

3. @CDSBGlobal www.cdsb.net 3
About
the
Climate
Disclosure
Standards
Board
+ CDSB
is
a
consor(um
of
business
and
environmental
organiza(ons
formed
at
the
2007
World
Economic
Forum’s
annual
Davos
mee(ng
+ CDP
has
provided
secretariat
support
since
incep(on
and
coordinates
day-­‐to-­‐day
ac(vi(es
Who
we
are

4. @CDSBGlobal www.cdsb.net 4
About
the
Climate
Disclosure
Standards
Board
Who
we
are
+ Supported
by
leading
industrial
&
financial
services
companies,
NGO
representa(ves,
the
major
accoun(ng
firms,
professional
bodies,
academics
and
other
specialist
collaborators

5. @CDSBGlobal www.cdsb.net 5
About
the
Climate
Disclosure
Standards
Board
+ CommiUed
to
the
integra(on
of
climate
change
related
informa(on
into
mainstream
corporate
repor<ng
+ Working
with
others
What
we
do

6. @CDSBGlobal www.cdsb.net 6
Guidance
issued
by
CDSB
About
the
Climate
Disclosure
Standards
Board

7. @CDSBGlobal www.cdsb.net 7
Guidance
issued
with
others
About
the
Climate
Disclosure
Standards
Board

8. @CDSBGlobal www.cdsb.net 8
External
repor<ng
drivers
+ Danish
Financial
Statements
Act
+ EU
Accoun(ng
Direc(ves
(proposed)
+ French
Grenelle
II
+ South
African
King
Code
+ UK
Companies
Act
+ Find
out
more
at
cdsb.net/standards
Mandatory
repor9ng

9. @CDSBGlobal www.cdsb.net 9
External
repor<ng
drivers
Proposed
amendments
to
EU
accoun9ng
direc9ves

10. @CDSBGlobal www.cdsb.net 10
External
repor<ng
drivers
+ Background
+ Amendment
to
the
Accoun(ng
Direc(ve
in
2003
(enacted
in
2005)
+ Required
companies
to
report
environmental
KPI
in
their
annual
report
+ 2,500
of
42,000
large
companies
in
the
EU
reported
+ Scope
(number
of
companies)
+ 250
–
500
employees
minimum
+ Turnover
€
metric
+ Loca(on
of
non
financial
statement
+ Within
6
months
of
balance
sheet
date
Proposed
amendments
to
EU
accoun9ng
direc9ves

11. @CDSBGlobal www.cdsb.net 11
+ Content:
+ Policies,
results,
risks,
due
diligence
+ Environmental
(plus
social,
employee,
human
rights,
an(-­‐corrup(on,
bribery)
+ The
use
of
renewable
and
non-­‐renewable
energy,
greenhouse
gas
emissions,
water
use
and
air
pollu(on
+ Compliance
tools
&
frameworks
+ Na(onal
/
EU
/
interna(onal
frameworks
+ EC
guidance
to
support
land
use,
water,
GHG
emissions
and
use
of
materials
+ Audit
/
verifica(on
+ Auditors
should
check
non-­‐financial
statement
or
separate
report
is
provided
+ Member
states
to
determine
if
independent
assurance
is
required
of
non-­‐
financial
statement
prepared
outside
the
report
+ Timeline
External
repor<ng
drivers
Proposed
amendments
to
EU
accoun9ng
direc9ves

12. @CDSBGlobal www.cdsb.net 12
External
repor<ng
drivers
GHG
emissions
repor9ng
by
UK
quoted
companies
+ Approx
1,100
–
1,600
fall
under
scope
of
new
requirements
+ 61
reported
from
FTSE
600
(30th
Sept
2013
–
24th
Feb
2014)
+ UK
quoted
companies
are
UK
registered
companies
with
equity
shares
(companies
trading
equity
or
equity
&
debts)
on
LSE
main
market,
EEA
regulated
market,
NYSE
or
NASDAQ

13. @CDSBGlobal www.cdsb.net 13
External
repor<ng
drivers
GHG
emissions
repor9ng
by
UK
quoted
companies

14. @CDSBGlobal www.cdsb.net 14
External
repor<ng
drivers
GHG
emissions
repor9ng
by
UK
quoted
companies

15. @CDSBGlobal www.cdsb.net 15
External
repor<ng
drivers
GHG
emissions
repor9ng
by
UK
quoted
companies

16. @CDSBGlobal www.cdsb.net 16
External
repor<ng
drivers
Preliminary
findings:
+ Materiality
not
clearly
defined
by
companies
+ No
clear
correla(on
between
materiality
assessment
and
discussion
of
risk
in
reports
+ Environmental
performance
disclosed
in
isola(on
without
narra(ve
+ Lack
of
clarity
on
boundaries
and
intensity
metrics
+ Addi(onal
guidance
for
prac((oners,
auditors,
solu(ons
providers,
etc.
could
be
useful
GHG
emissions
repor9ng
by
UK
quoted
companies

17. @CDSBGlobal www.cdsb.net 17
External
repor<ng
drivers
Many
organisa(ons
may
prepare
and
publish
informa(on
requested
by:
This
may
expand
to:
Voluntary
repor9ng

18. @CDSBGlobal www.cdsb.net 18
Not
another
Framework?
+ Prepare
&
present
environmental
performance
&
risk
informa(on
in
mainstream
financial
reports
+ Designed
to
allow
investors
to
assess
the
rela(onship
between
environmental
performance
&
risks
and
the
organisa(on’s
strategy
&
prospects
+ Cross
referencing
other
repor(ng
requirements
(CDP
CC4)
CDSB
Framework
focuses
on
iden9fying
environmental
risk
in
mainstream
reports

19. @CDSBGlobal www.cdsb.net 19
Not
another
Framework?
+ Harmonise
repor(ng
of
environmental
risk
by
having
it
included
in,
or
linked
to,
an
organisa(on’s
mainstream
financial
report
+ Environmental
performance
&
risk
subject
to
the
same
Interna(onal
Financial
Repor(ng
Standards
&
assurance
requirements
as
financial
informa(on
+ Centrally
deposited
with
competent
na(onal
authority
promptly
and
publically
available
+ Working
with
regulators,
CDP
and
the
Fujitsu
Research
Ins(tute
to
develop
an
eXtensible
Business
Repor(ng
Language
(XBRL)
taxonomy
Advantages
of
mainstream
reports
Climate
change
informa(on
in
CDP
and
other
disclosures
CDSB
Framework
Annual
Report

20. @CDSBGlobal www.cdsb.net 20
Not
another
Framework?
+ Focus
of
previous
CDSB
Framework
on
climate
change
risks
&
opportuni(es
affec(ng
an
organisa(on’s
strategy
and
financial
performance
+ Scope
has
now
expanded
into
forest
commodity
risks
and
water
+ The
expansion
of
the
CDSB
Framework
will
now
cover
79%
of
natural
capital
Aiming
for
natural
capital
repor9ng

21. @CDSBGlobal www.cdsb.net 21
Consulta9on
open
19th
February
–
12th
May
2014
+ 90
day
consulta(on
period
open
+ Online
consulta(on
planorm
+ Public
comments
promote
dialogue
among
reviewers
+ Consulta(on
planorm
will
manage
consulta(on
process
+ Available
at
cdsb.net/consulta(on
Not
another
Framework?

22. @CDSBGlobal www.cdsb.net 22
Summary
Concluding
remarks
+ CDSB
working
with
others
on
sustainability
repor(ng
+ Disclosures
by
UK
quoted
companies
suggest
mixed
success
in
compliance
with
new
UK
Companies
Act
requirements
+ Amendments
to
EU
Accoun(ng
Direc(ves
at
cri(cal
point
+ CDSB
Framework
expanded
scope
and
aiming
for
natural
capital
+ Consulta(on
now
open,
comments
welcome

23. @CDSBGlobal www.cdsb.net 23@CDSBGlobal
@CDSBGlobal
Climate
Disclosure
Standards
Board
facebook.com/CDSBGlobal
Subscribe
to
our
newsleUer
at
cdsb.net/newsleUer
Thank
you
jarlath.molloy@cdsb.net